Doing Business in Asia
William Chu
International Trade Division
North Carolina Dept of Commerce
2010 April
China
Beijing
Shanghai
Macau
Guangzhou
Shenzhen
Taiwan
Hong Kong
Canton Fair
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China’s No. 1 fair
15,000 products varieties on display
40% of China’s newest product in exhibit
22,320 exhibitors @ 12 million ft2 floor space
188,170 buyers
55,927 display booths
Brought in US$30.5 billion businesses @ show in 2009
53 years in history of making
Interzum Guangzhou 2010
China & India on
Global Recovery Driver Seats
Global Real GDP
(annualized quarterly growth rates)
Global
Developed
Economies
EMERGING
GLOBAL
U.S.
U.K.
Euro Area
Japan
DEVELOPED
Emerging
Economies
China
Source: International Monetary Fund
India
Brazil
CHINA
China &
ASEAN
How to Enjoy Zero Tariff?
Meet one of the following conditions:
• Products are completely
originated in China;
• The value of the materials
coming from other than
China and ASEAN countries
is less then 60%; or
• Products are produced by sufficient
processing the materials coming from
other than China and ASEAN countries.
How Does ASEAN Cope with
This Sweeping Change?
• Not so 10 years ago, the trade balance titled to
ASEAN.
• Today: –
–
–
–
–
–
–
–
Chinese competition has growing louder
A direct competition with Chinese firms will be deadly
A lower cost of capital
A lower wages in China
A limited accountability to shareholders
Chinese investments are sweeping in ASEAN
ASEAN becomes a popular place for Chinese investments
ASEAN in general accept Chinese quality with low pricing
Opportunities & Challenges
In Asia Markets
Emerging Asia Market
• Economic expansion policy in general.
• Export trade returning – especially the demand from China
market which is helping the region to flourish
• Rising inflation with low household’s debt pushes up
consumers’ spending.
• Rising exports in Vietnam made them the fastest GDP growth
in the 1st half of 2010.
• Indonesia is the largest nation in ASEAN and accounted for
60% consumer spending. The growth will get stronger due to
a boom in domestic investments.
• Malaysia has a strong and stable economy and
it is one of the fairly mature market in ASEAN.
Risk Factors in Emerging Market
• Full recovery is not yet proven.
• Majorities depend on the export markets
aboard which are facing slow recovery and
not yet quite normal.
• Government’s economic stimulus can’t last
forever.
• Increased the consumers’ spending to correct
global recovery is not an easy task.
• Increased risk from capital asset
bubble.
Huge Market Potential in the Asia
Emerging Market
Opportunities in Asia Emerging Market
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Rising middle-class consumers
Cities migration
Modernization in retail sector
Sell goods directly to retailers or at help of
distributors
• Opportunity in building brands
Market Entry Strategies
• Don’t dump products that do not sell well.
• Introduce quality products similar in here.
• Products with good features and reasonable
price fetch success.
• Created branded product to standout from
domestic goods.
• Provide warrantee and after-sales services
especially to electronic items.
Challenges and Risk Factors in the
Emerging Markets
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Stability in government and fiscal budget
Bureaucracy, corruption and protectionism
Infrastructures not sound
Retailer sector immature
Purchasing power is limited
Developing Chinese Market
• Major cities in China’s coastal region has a faster
phase of recovery.
• Government’s stimulus packages to help rural
development benefited the purchasing power in the
2nd and 3rd tiers cities.
• The stock market and housing price surged
increased demand for medium- to high-end goods.
• Market the trendy products to meet the need of
affluent class.
• Consider using several market channels for
penetration – franchise store is a popular one.
China’s Super-Rich Population
Hits 825,000
Thank You!
William Chu, Representative
State of North Carolina Asia Pacific Office
Room 805-6, Tesbury Center,
28 Queen’s Road East, Wanchai, Hong Kong
Tel：852-28650555‧Fax：852-25270819
Email：wichu@netvigator.com